Becoming an international business is an impressive accomplishment, but not every brand or retailer is ready for the challenge. Before opening your online shop to overseas markets, there are many considerations to ensure your preparedness. For example, there’s the question of timing. Enter a market too quickly and your could find that your e-commerce business lacks the ability to scale properly, and you can’t keep up with demand. Enter too late, and you could face tougher competition from cross border e-commerce competitors who have already seized market share in that country.
How can a domestic e-commerce company be sure they have what it takes to go global? Here are five signs for brands and retailers to help determine whether they’re ready to expand into new, international markets.
- You've outgrown your domestic market. They say “there’s always room for growth,” but if your brand has already built a hearty national customer base, expanding internationally might be the next step to acquiring new customers and keeping your business growing organically. However, keep in mind that no matter how big your brand identity is at home, it may not translate well to a different language or culture. You'll still need to provide a localized experience in your target global market that reflects consumers' language and cultural preferences.
- Your sales are seasonal or event-driven in one market. Going global can increase overall demand for your products. This is especially attractive for brands and retailers who experience revenue fluctuation in their home market due to seasonal changes or demand cycles (such as Back to School or Christmas vs. January off-season). By appealing to a wider array of consumers who may not follow the same seasonal calendar and holiday-driven buying patterns, brands and retailers can even out sales all year round. (See more about the potential for selling around global holidays.)
- You know there's an international market for your goods. Some brands and retailers first start entertaining the idea of going global when they notice significant and consistent traffic to their domestic e-commerce site from customers in other countries. This was the case with Flow client MVMT. However, many retailers learn the hard way that a product selling well in their home country may not have the same appeal elsewhere. Brands and retailers must do the market research to answer the questions: Do I have a built-in customer base in the foreign market I want to enter? And can I reach that customer base in the target market?
- You've mastered the art of competitive pricing. Brands and retailers with a proven formula for pricing their goods when compared to similar domestic retailers will have a leg up when they enter new markets. Cross border e-commerce introduces greater complexity when it comes to pricing, especially when it comes to factors such as landed cost. But retailers who have spent considerable time developing a domestic pricing strategy may find that going global is more of an extension of that work.
- You're already supporting alternative payments. Domestic retailers who are already in tune with their customers' checkout preferences will be better prepared for providing a wider array of payment options in global markets. Be aware that different countries have different payment preferences, and if you become an international business, it will be a requirement to understand which payment options are most popular in each region.
Another consideration is the available bandwidth of your team. International expansion places a greater demand on the management team and staff, particularly when it comes to tasks such as regulatory approvals, taxes, duties and customs, and of course, order fulfillment, logistics and shipping. Managing all of these aspects, along with delivering localized e-commerce websites and customer service in each target country, can be daunting. To deal with scaling and then maintaining a seamless international presence once your international store has been launched, many brands and retailers rely on Flow to help.